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G7 nears $1B gold sale
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April 15, 1999: 10:58 a.m. ET
G7 close to selling 100 tons of gold, with more to follow says U.K. finance minister
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LONDON (CNNfn) - The G7 nations are close to a deal to sell up to 100 tons of gold to fund debt relief for emerging market nations, U.K. finance minister Gordon Brown said Thursday.
Brown has been at the vanguard of the debt relief plan sponsored by the International Monetary Fund and said approval was close on the sale of $1 billion worth of bullion, with more to come.
"I confidently expect that all G7 members will now support the sale," Brown told the British parliament Thursday, indicating the deal would take place before the end of the year.
Gold prices slid Wednesday after IMF deputy managing director Alassane Ouattara said a "large majority" of G7 states supported the plan. The United States has already voiced its approval and Germany, which had resisted the idea, was now in favor.
After falling $2.15 an ounce Wednesday at the London Bullion Exchange, the afternoon fix Thursday was up 40 cents at $283.85, still well down on the 1999 high of $302.35.
Market strategists said that while some of the prospective G7 sales have been priced into the market, there was still inherent weakness despite the support gained from the war in Kosovo and the slide in the dollar.
Speculators have built up a large short position in anticipation of a continuing downward trend, and that may precipitate a further sell-off.
-- from staff and wire reports
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